But if “bad” is not only allowed, but rewarded, then “bad” will definitely replace the corresponding “good.”
Well, Tom Gresham, meet mass torts.
The Eighth Circuit handed down a stinker of a ruling yesterday in In re Prempro Products Liability Litigation, No. 09-1205, slip op. (8th Cir. Jan. 6, 2010) (hereafter “PPLL”). As the name indicates, it arose from the Prempro MDL. But the identity of the drug hardly matters – or even whether the product was a drug. It could be any mass tort, as far as we’re concerned.
That’s also convenient because Dechert is now involved in the litigation involving these products, so we have to steer away from anything concerning the merits of that litigation.
So what happened in PPLL? It’s the latest round in the endless tactical tug of war between plaintiffs who prefer to litigate in state court (elected judges, more home cooking, less strict rules on everything from pleading to class actions to experts) and defendants who prefer to litigate in federal courts (lifetime tenured judges, more resources = more opinions, stricter rules, etc.). It involves something called “fraudulent misjoinder.”
What’s that? Well, under the rules, every plaintiff is supposed to file his/her/its lawsuit individually. That means pay the court’s filing fee (one way the judicial branch supports itself), and have jurisdiction – importantly, diversity jurisdiction – determined by who the parties are. (Aside for non-lawyers: “diverse” = plaintiff and defendants are citizens of different states; “non-diverse” = citizens of same state on both sides of the “v.”).
There are exceptions. Federal Rule 20 governs “permissive joinder.” It provides that plaintiffs or defendants may be “joined” in the same lawsuit if there’s a claim (called a “right to relief”) asserted either by more than one plaintiff or against more than one defendant: (1) that involves (called “arising out of”) “the same transaction, occurrence, of series of transactions or occurrences” and (2) “any question of law or fact common to” all plaintiffs or defendants “will arise in the action."
“Misjoinder” is any joinder of parties that’s in violation of Rule 20 (or an equivalent state court rule).
The most obvious misjoinder is something like this. Plaintiff A from state X was involved in a car crash with defendant B from state Y. Plaintiff’s lawyer wants to stay in state court (maybe s/he made political contributions to the judges), so s/he joins that case with another client from state Y who was in a different auto accident with a defendant from state X.
If each of those two hypothetical cases were filed separately, both would be removable to federal court due to diversity of citizenship. Join them together and – presto! – diversity disappears, and both cases stay in state court.
Except that the cases are blatantly misjoined. Two separate accidents in two separate states involving completely separate parties aren’t the “same series of transactions.” Nor is merely having the same plaintiff’s lawyer and, say, the same accident reconstructionist as both plaintiffs’ expert witness, enough to make a “common” question of law or fact.
The idea of “fraudulent misjoinder” – that federal courts should look behind the misjoining of motley plaintiffs, defendants, and claims in order to destroy diversity for the purpose of keeping what should be diverse cases out of federal court – was created to stop this sort of funny business.
But now to mass torts. Is a joinder of a whole bunch of plaintiffs from different states a fraudulent misjoinder when the only thing they have in common is that they claim the same kind of injury from the same product? If it’s a drug or device mass tort, that means the every plaintiff has different treating doctors, different medical histories, different timing (often years apart), different degrees of damage, different applicable state laws, etc.
That’s what happened in PPLL. In one complaint, fifty-seven (57) different plaintiffs (the caption alone takes up the first four pages of the slip opinion) sued eleven different drug manufacturers. In another six plaintiffs sued six manufacturers. In a third case, sixty (60) plaintiffs sued eight defendants. In each of these cases, at least one of the plaintiffs was a citizen of the same state of at least one of the defendants. PPLL, slip op. at 5-6.
But in no case – we assume, anyway, because its something we expect that the opinion would have mentioned – was the plaintiff a citizen of the same state as the manufacturer of the drug that that plaintiff allegedly took.
It’s clearly a misjoinder. Even the Eighth Circuit in PPLL didn’t claim otherwise:
We clarify that we make no judgment on whether the plaintiffs’ claims are properly joined under Rule 20. It may be that the plaintiffs’ claims are not properly joined, and it has been suggested that the proper procedure may be for the manufacturers to argue that to the state court. However, it is not clear that the joinder is so egregious and grossly improper under the broadly interpreted joinder standards that it warrants an adoption and application of the fraudulent misjoinder doctrine.
Slip op. at 18-19 (footnote omitted).
Plaintiffs in mass tort actions have filed polyglot complaints like this for years, even when diversity wasn’t an issue. Why? Their counsel were cheapskates, for one thing. They'd use mass filings to avoid paying separate filing fees for each of their clients – when that happened in Shelby County, Tennessee (Memphis) in the Bone Screw litigation, a strapped court clerk’s office prevailed on the local judges to put a stop to it. In some other places (Mississippi, West Virginia), counsel turned to mass filings to evade restrictions on class actions.
And for just as long, federal courts have held that polyglot complaints of this nature violate the permissive joinder requirements of Rule 20. The practice apparently started – as did so many bad things in product liability law – with asbestos. But in In re Asbestos II Consolidated Pretrial, 1989 WL 56181 (N.D. Ill. May 10, 1989), the court held that a single complaint filed by more than 100 disparately situated asbestos plaintiffs was misjoined:
No allegation is made that the individual plaintiffs and decedents suffered exposure to products of any defendant at the same time nor at the same place. Further, although plaintiffs and decedents all appear to suffer from the same asbestos-related disease, pleural asbestosis, all plaintiff’s exposure differs as to duration and magnitude. Distinct claims cannot be properly joined under Rule 20 merely because they have common theoretical underpinnings.
Plaintiffs’ concern for judicial economy in joining these claims is duly recognized by the court, but nevertheless, joinder does not alleviate the confusion that would be characteristic of a trial involving over 100 plaintiffs, each with an individual claim based on unique facts, the very situation that Rule 20 requirements are designed to minimize.
Id. at *1.
Multiple-plaintiff complaints were soon filed in drug/device mass tort litigation. Again, the impropriety of such tactics was recognized. “[J]oinder based on the belief that the same occurrence or transaction is satisfied by the fact that claimants have the same or similar device of a defendant manufacturer implanted in or about their spine is. . .not a proper joinder.” In re Orthopedic Bone Screw Products Liability Litigation, 1995 WL 428683, at *1-2 (E.D. Pa. July 15, 1995).
At this point, there’s been so many decisions of this nature, that we couldn’t possibly cite them all. In the fen-phen litigation alone, the list of decisions severing multi-plaintiff complaints is as long as your arm. Boyd v. Wyeth, Inc., 2007 WL 2458021 (E.D. Pa. Aug. 23, 2007); Greene v. Wyeth, 344 F. Supp.2d 674 (D. Nev. 2004); In re Diet Drugs, 325 F. Supp.2d 540 (E.D. Pa. 2004); Ellison v. American Home Products Corp., 2004 WL 2095451 (E.D. Pa. Sept. 20, 2004); Brewer v. Wyeth, 2004 WL 2095452 (E.D. Pa. Sept. 20, 2004); Geisert v. American Home Products Corp., 2004 WL 2029115 (E.D. Pa. Sept. 10, 2004); Stevens v. Wyeth, 2004 WL 1969685 (E.D. Pa. Sept. 3, 2004); Tate v. Wyeth, 2004 WL 1354411 (E.D. Pa. June 16, 2004); Killebrew v. Wyeth, 2004 WL 1211928 (E.D. Pa. June 2, 2004); McCrory v. Wyeth, 2004 WL 1508321 (E.D. Pa. June 2, 2004); Turner v. American Home Products Corp., 2004 WL 1527807 (E.D. Pa. June 2, 2004); Edwards v. Wyeth, 2004 WL 1535807 (E.D. Pa. June 2, 2004); Legg v. Wyeth, 2004 WL 1535808 (E.D. Pa. June 2, 2004); Russum v. Wyeth, 2004 WL 1535809 (E.D. Pa. June 2, 2004); Martin v. Wyeth, 2004 WL 1535811 (E.D. Pa. June 2, 2004); Phelps-Dorris v. American Home Products Corp., 2004 WL 1146680 (E.D. Pa. May 21, 2004); Waters v. Wyeth, 2004 WL 1125924 (E.D. Pa. May 20, 2004); Allen v. Wyeth, 2004 WL 1125927 (E.D. Pa. May 20, 2004); Jobe v. Wyeth, 2004 WL 1125929 (E.D. Pa May 20, 2004); Woodcock v. Wyeth, 2004 WL 1146674 (E.D. Pa May 20, 2004); Grant v. Wyeth, 2004 WL 1146677 (E.D. Pa. May 20, 2004); Stimage v. Wyeth, 2004 WL 945144 (E.D. Pa April 29, 2004); Anderson v. Wyeth, 2004 WL 1146683 (E.D. Pa. April 29, 2004); In Re: Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Products Liability Litigation, 2004 WL 785069 (E.D. Pa. March 24, 2004); In Re: Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Products Liability Litigation, 294 F. Supp.2d 667, 677-79 (E.D. Pa. 2003); In re Diet Drugs Products Liability Litigation, 1999 WL 554584 (E.D. Pa. July 16, 1999).
Indeed, the onslaught of polyglot plaintiff complaints has become something of mass tort ritual. Here’s a by-no-means-complete list of other drug/device mass torts where multi-plaintiff complaints have been blow up on grounds of massive misjoinder. Alday v. Organon USA, Inc., 2009 WL 3531802, at *1 (E.D. Mo. Oct. 27, 2009) (Nuvaring); Warner v. Stryker Corp., 2009 WL 1773170, at *1-2 (D. Or. June 22, 2009) (pain pumps); Boschert v. Pfizer, Inc., 2009 WL 1383183, at *3-4 (E.D. Mo. May 14, 2009) (Chantix); Cumba v. Merck & Co., 2009 WL 1351462, at *1 (D.N.J. May 12, 2009) (Vytorin); In re Levaquin Products Liability Litigation, 2008 WL 4534229, at*1 (D. Minn. Sept. 29, 2008); Jones v. Nastech Pharmaceutical, 319 F. Supp.2d 720 (S.D. Miss. 2004) (Stadol); McNaughton v. Merck & Co., 2004 WL 5180726, at *2 (S.D.N.Y. Dec. 17, 2004) (Vioxx); In re Baycol Products Liability Litigation, 2002 WL 32155269, at *2 (D. Minn. ??? ??, 2002); In re Rezulin Products Liability Litigation, 168 F. Supp.2d 136, 145-46 (S.D.N.Y. 2001); Graziose v. American Home Products Corp., 202 F.R.D. 638, 640 (D. Nev. 2001) (PPA); Simmons v. Wyeth Laboratories, 1996 WL 617492, at *1 (E.D. Pa. Oct. 24, 1996) (Norplant).
Some state courts have done it too, mostly down south. In Alabama, the state attorney general, of all people, misjoined 73 different pharmaceutical defendants in “transactions [that] involved different companies, different products, and different time periods over 15 years.” Ex parte Novartis Pharmaceuticals Corp., 975 So. 2d 297, 303 (Ala. 2007). And in Mississippi, a series of decisions broke the back once and for all of earlier allowance of thousand-plaintiff monstrosities. Wyeth-Ayerst Laboratories v. Caldwell, 905 So.2d 1205, 1208-09 (Miss. 2005); Janssen Pharmaceutica, Inc. v. Bailey, 878 So.2d 31, 45-48 (Miss. 2004); Janssen Pharmaceutica, Inc. v. Armond, 866 So. 2d 1092, 1096-98 (Miss. 2004). See also Adams v. Baxter Healthcare Corp., 998 S.W.2d 349, 357-58 (Tex. App. 1999) (disapproving similar misjoinder).
Then along comes the Eighth Circuit yesterday: holding that any number of plaintiffs, living anywhere in the country have enough of a “logical relationship” as long they allege the same injury against some manufacturer of the same type of drug – not even the same drug – on any type of theory:
[W]e conclude that the manufacturers have not met their burden of establishing that plaintiffs’ claims are egregiously misjoined. Plaintiffs’ claims arise from a series of transactions between. . .pharmaceutical manufacturers and individuals that have used [their] drugs. Plaintiffs allege the manufacturers conducted a national sales and marketing campaign to falsely promote the safety and benefits of [these] drugs and understated the risks of [the] drugs. Plaintiffs contend their claims are logically related because they each developed [the same injury] as a result of the manufacturers’ negligence in designing, manufacturing, testing, advertising, warning, marketing, and selling [this type of] drugs. Some of the plaintiffs allege to have taken several [of these] drugs made by different manufacturers.
PPLL, slip op. at 16-17.
If that’s all it takes, then any mass tort plaintiff – no matter how diverse his or her individual claims – who wants to be in state court (which is just about all of them) can try the same thing as in PPLL. Just find one plaintiff who resides in the same state as any of the defendants, and join that plaintiff’s claims together with claims asserted by ten thousand of that plaintiff’s newly discovered close friends. Who needs federal MDLs anyway?
That’s where Gresham’s law comes in. As that law posits, bad practice (if allowed – or in the case of PPLL, rewarded) drives out the good. If absurdly misjoined complaints of the sort permitted to destroy diversity in PPLL are permitted, then it won’t be long before we won’t see any other kind, at least in mass torts. Why plead the way the rules say you’re supposed to, if you can get away with (and get away from the federal rules altogether), pleading improperly.
It’s demonstrably happened before. Since we started this blog, one of our (many) pet peeves has been class action tolling. We’ve harped on the fact that the American Pipe rule rewarding the filing of even (especially) meritless class actions by tolling the statute of limitations for putative class members encourages meritless filings. That's why we still see meritless personal injury class actions being filed in prescription medical product (and lots of other) liability litigation – despite chances for certification that, by now, are for all intents and purposes nil. After all, what’s the down side, beyond the effort of litigating a motion that’s going to lose?
Finally, we also think that the kind of malodorous misjoinder that the Eighth Circuit just winked at in PPLL is different in kind from other sorts of removal-related gamesmanship that we’ve blogged about, such as removal before service. It’s different because tactics like removal before service don’t have any inherent, lasting effect on either the cases involved or the system. They’re just litigated in a different court according to somewhat more or less stringent rules.
That’s not the case with 1000-plaintiff whoppers. How do you try one of those? How do you apply evidentiary exclusions like subsequent remedial measures? How do you manage it? It’s not a class action, so how does one file papers relevant to particular plaintiffs? It’s a court clerk’s nightmare, and one for which all but one of the plaintiffs is bilking the clerks’ office out of the filing fees that pay their salaries. How does a defendant plead to such a complaint? How does one assert affirmative defenses?
In short, while removal before service is a form of gamesmanship, it’s relatively harmless. It does not damage either the parties’ ability to litigate or the court system itself. Massive, multi-plaintiff complaints are another matter entirely. They create a procedural and managerial morass that will persist for the life of the litigation – unless and until somebody, somewhere does the right thing and orders severance (almost inevitably after the one-year period for removal on the basis of diversity jurisdiction has expired).
One can only hope that the Supreme Court sees the true nature of the Frankenstein’s monster that the Eighth Circuit has just animated. If it doesn’t take an appeal directly from PPLL, things could get rather difficult for a long time, because (as we’ve noted in connection with our removal-before-service posts) it’s not easy to obtain appellate review of remand orders.